Item 8.01 Other Events

Approval of Application to Recover Hydroelectric Facility Divestiture Costs

On April 16, 2009, the California Public Utilities Commission (CPUC) voted to approve a decision authorizing Pacific Gas and Electric Company (Utility) to recover approximately $47 million of costs, including approximately $12 million of interest, which the Utility incurred in connection with its efforts to determine the market value of its hydroelectric generation facilities in 2000 and 2001. These efforts were undertaken as required by the CPUC in connection with the proposed divestiture of the facilities to further the development of a competitive generation market in California. The CPUC subsequently withdrew this requirement and the Utility continues to own its hydroelectric generation assets. The Utility expects that the rate adjustments necessary to recover these authorized costs will be combined with other rate adjustments in the Utility's annual electric rate true-up proceeding. These rate changes are expected to become effective in January 2010.

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